Christmas is approaching, which means many companies are starting to buy Christmas presents for their employees. Be aware that different tax rules can apply depending on how a company gift is categorised.
Read on to get an overview of the rules for different kinds of company gifts.
Company gifts given during the year
You can give an employee company gifts in the form of gifts in kind worth up to DKK 1,200 a year incl. VAT without the gifts being taxed. The DKK 1,200 is known as the de minimis limit, and its rate is updated every year. So remember to check the de minimis limit again next year, as it may be different. If the company gifts given during the year have a total value of more than DKK 1,200, all the gifts will be taxable.
If the value of the gifts is under DKK 1,200, no tax has to be paid on them. But be aware that if the total value of the gifts exceeds DKK 1,200, all the gifts must be taxed.
Be aware that cash given as a Christmas present is always taxable, whatever the amount.
Special rules for Christmas presents
Gifts in kind with a market value of under DKK 900, given as a Christmas present, can be kept out of the total for company gifts, so they aren't taxable, however many other company gifts have been given during the year.
If the value of a Christmas present is DKK 901 or more, the gift is taxable. (provided that other company gifts have been given during the year and the total value of all the gifts exceeds DKK 1,200)
Gift cards
As a general rule, gift cards are taxable and are taxed in the same way as the employee's ordinary salary.
There are, however, a few exceptions in the form of online gift cards for predetermined gifts, or gift cards for a particular restaurant or an inn stay. These gift cards aren't counted in the de minimis limit for normal company gifts. Be aware, though, that it is a requirement that the gift cards can't be exchanged for cash. Read more about the exceptions (in Danish)
There are also gift cards that are always taxable. These include gift cards that can be exchanged for cash, or gift cards that can be used for a wide range of things. Read more about taxable gift cards here (in Danish)
Experience gift cards (for the year 2021)
As a new measure in 2021, an employer can give an employee one or more experience gift cards with a total value of up to DKK 1,200. This is on top of the DKK 1,200 that can still be given to employees as normal company gifts without being taxed.
The gift cards must be for experiences in Denmark or other EU/EEA countries and must be given in 2021. The employee can, however, use the gift card in 2022 or later, as long as the gift card was received in 2021′
Anniversary bonuses
As a starting point, anniversary gifts to employees are taxed in the same way as salary.
There are, however, a few exceptions:
If an employee is celebrating their 25th, 35th, 45th or 50th anniversary, the company can give them a gift worth up to DKK 8,000 without it being taxable.
If the company is celebrating an anniversary of at least 25 years, it can give its employees gifts worth up to DKK 8,000. For this to be tax-free, however, the company must give the same gift to all employees. In this case, the company can deduct the full amount as operating costs.
The company can also give a severance payment of up to DKK 8,000 tax-free.
For private occasions such as a milestone birthday, a wedding or the like, occasion gifts can be given that don't count towards the de minimis limit of DKK 1,200. This applies to gifts of a modest value that suit the occasion on which they are given. There is no fixed amount limit for occasion gifts, so be aware of this and check with SKAT if you're unsure whether the gift has a suitable value
Register company gifts in Zenegy
In Zenegy, the company can register taxable gifts given to the employee. This is registered under “Employee benefits”, where you can also specify the type of gift. It is then the employee's own responsibility to report it to SKAT if they have received one or more taxable gifts. The registered company gifts appear on the employee's payslip, both for the period and year to date, so the employee always has an overview of how much must be reported.
